news • Sep 07 2023

Opportunity Spheres: The Upside of the Urban "Doom Loop"

Cities are always changing. In many metropolitan areas in America, the COVID-19 pandemic significantly upset the commercial real estate industry. With employees working from home and storefronts empty, people began to wonder if downtown areas would become “urban doom loops.” But in contrast to alarmist newspaper headlines and scary segments on TV, the term “doom loop” entered the lexicon long ago. 

In fact, American cities have frequently faced periods of downturn in the past. But here’s the truth you don’t always see: heavy struggle in urban centers often leads to great prosperity. Here, we’ll explain the natural evolution of struggling economic periods and how they often lead to “opportunity spheres.” 


The “Urban Doom Loop” Through History 

The theory of the urban doom loop isn’t anything new. In the period after WWII, soldiers returned home to the United States in droves and took jobs in manufacturing. That era of postwar prosperity created great success in the mills and factories that fueled the country’s livelihood. But as work was sent overseas and factories shut down, people could no longer afford to live in major metropolitan areas. 

Between 1970 and 1980, New York City and its suburbs lost 1.6 million people. The city was in financial devastation, and crime rose. Commercial real estate staggered at that time. But soon, the city triumphed, and an expansion of the national economy helped the city bounce back. It’s a strong example of how cities have the capacity to constantly rebound from upheaval.


A Residential Opportunity Sphere

Some experts say that the current difficulties of urban areas could lead to expanded residential development. At the moment, many American cities are in a dire housing shortage. The need for new homes is serious. But in a positive turn, some experts say it could lead to the production of housing for more people. 

One writer, a San Francisco resident, wrote in Business Insider that it’s simply a matter of supply and demand. “More places to live means they get cheaper. Homelessness decreases, which means fewer of my neighbors will be forced to live in mobile homes or tents. It’s no coincidence that the places in the United States with the most new home construction are also those with the fewest homeless people and lower housing costs.” 


A Commercial Opportunity Sphere

Several urban metropolises are experiencing commercial growth. San Francisco is having a revolution of its own, particularly when it comes to food, entertainment, and nightlife, according to experts. It’s even having a bar boom. One restaurateur said “While San Francisco definitely has had its trials and tribulations recovering from COVID, we feel like this is the ideal time. I think people are ready for that kind of Roaring ’20s revitalization, which we’ve noticed is happening in San Francisco.” 

It’s a similar tune in other cities, like Seattle, where the return of commuters is the catalyst for a return of other businesses, whether it’s coffee shops, tailors, or restaurants. Amazon, downtown Seattle’s largest employer, has staff returning to offices three days per week, which will likely propel others to follow suit by acquiring new commercial space they gave up during the pandemic. 

Thus far, the numbers are good: According to the Seattle Times, downtown Seattle had 2.98 million visitors in June, surpassing totals from June of 2022 by more than 80,000. All that increased foot traffic boosts the economy, and encourages new businesses to stake their claim on the downtown area. That same expansion is taking place throughout the rest of the country, particularly the southern United States, where the GDP exceeded that of Washington, D.C. and all northeastern states from Maryland to Maine (22.4%) for the first time ever, according to a story in Forbes.  Clearly, growth is everywhere. 


Opportunity Spheres of the Future

The future is when the magic happens. Many lifetime residents of urban areas are familiar with the constantly changing cycle of cities. One San Francisco expert said that he’s seen three downturns in San Francisco, “and with each one, he noticed the creativity it sparks within business owners.” It’s a familiar attitude. Many experts say this is the time to double down on density. “Cities with the housing and transportation to support density, job growth and accessibility will prosper,” Bloomberg reported.

Periods of struggle can inspire greatness. In contrast to the headlines that cause many to panic, the “urban doom loop” may not be on the horizon. In fact, an opportunity sphere could be. From a much-needed answer to our housing shortage to a renaissance of storefronts, restaurants and more, cities have the opportunity to grab onto greatness right now. By thinking outside the box and looking toward the future, an opportunity sphere can be forthcoming.

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